At the end of the 2016 accounting period DeYoung Company determined that the market value of its inventory was $79,800. The historical cost of this inventory was $81,400. DeFazio uses the perpetual inventory method. The entry necessary to reduce the inventory to the lower of cost or market will

decrease assets and decrease net income.increase assets and increase net income.decrease assets, gross margin, and net income.decrease assets and decrease gross margin.